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TheStreet Open House

Analysts' Actions: Allergan, Ann, Delek US, Hibbett Sports and More

Stocks in this article: AGNANNDJHIBBWGL

NEW YORK (TheStreet) -- RATINGS CHANGES

Allergan (AGN) was upgraded at Leerink Swann to outperform from market perform. Risk/reward is compelling, following a significant pullback in the stock, Leerink Swann said. Twelve-month price target is $184.

ANN (ANN) was downgraded at UBS to neutral. Twelve-month price target was changed to to $37, based on lower visibility for top-line drivers, UBS said.

Read More: Pandora's Got Static and Has Lost 53% of Its Market Share in 6 Months

Avis Budget (CAR) was upgraded to buy at TheStreet Ratings.

CST Brands (CST) was upgraded at Credit Suisse to neutral. Company can deliver solid growth, Credit Suisse said. Twelve-month price target was raised to $35.

Delek US (DK) was upgraded at Cowen to outperform from market perform. Twelve-month price target is $43. Company is attractively valued, on a sum-of-the-parts basis, Cowen said.

Hibbett Sports (HIBB) was downgraded at Sterne Agee to neutral. Poor store traffic is weighing on sales, Sterne Agee said.

Hibbett Sports was downgraded at BMO to market perform. Second-quarter earnings came in short of expectations, BMO said. Twelve-month price target was lowered to $52.

Hibbett Sports was downgraded at Credit Suisse to underperform from neutral. Twelve-month price target is $42. Company has an uncertain outlook, Credit Suisse said.

John Bean Technologies (JBT) was upgraded to buy at TheStreet Ratings.

Nvidia (NVDA) was upgraded at Needham to buy from hold. Twelve-month price target is $23. Company is going through a fundamental transformation and expanding margins, Needham said.

Pozen (POZN) was upgraded at Ascendiant Capital to buy. Company is seeing higher licensing and royalty revenue, Ascendiant Capital said.

Read More: How Wall Street Tobacco Deals Left States With Billions in Toxic Debt

WGL (WGL) was upgraded at Brean to buy from hold. Twelve-month price target is $45. Both sides of the business are performing ahead of expectations, Brean said.

Editor's note: To see analysts' stock comments and changes to price targets and earnings estimates, go to "Street Notes" which is available only to Real Money subscribers. To find out how to become a subscriber, please click here.

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Now let's look at TheStreet Ratings' take on some of these stocks.

TheStreet Ratings team rates ANN INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANN INC (ANN) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ANN's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • ANN INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ANN INC increased its bottom line by earning $2.19 versus $2.10 in the prior year. This year, the market expects an improvement in earnings ($2.38 versus $2.19).
  • The gross profit margin for ANN INC is rather high; currently it is at 58.21%. Regardless of ANN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.87% trails the industry average.

TheStreet Ratings team rates ALLERGAN INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLERGAN INC (AGN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, compelling growth in net income and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 5.4%. Since the same quarter one year prior, revenues rose by 16.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 3.39, which clearly demonstrates the ability to cover short-term cash needs.
  • ALLERGAN INC has improved earnings per share by 17.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALLERGAN INC increased its bottom line by earning $4.20 versus $3.57 in the prior year. This year, the market expects an improvement in earnings ($5.79 versus $4.20).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income increased by 15.9% when compared to the same quarter one year prior, going from $359.90 million to $417.20 million.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 82.02% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

This article was written by a staff member of TheStreet.

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